Saudi returns to the international debt market months after saying it was done for the year

Saudi Arabia is back in the international debt market — which it said in May it was done with for the year. The Kingdom issued USD 3.25 bn in two benchmark-sized USD sukuk tranches at five and 10 years, with the order book exceeding USD 16.5 bn yesterday, according to a statement by the National Debt Management Center.

The terms: Initial price thoughts came at c.100 bps over US Treasuries for the five-year tranche and 110 bps for the 10-year notes, before tightening to final spreads of 70 bps and 80 bps, respectively, Bloomberg reports. The Reg S notes are expected to be rated Aa3 by Moody’s and A+ by Fitch, according to Zawya.

This is the conditional return that was flagged earlier this year: The National Debt Management Center (NDMC) said in May that it had largely finished its borrowing for the year, with 90% of financing needs secured before the war. While the NDMC named private channels and local markets as the “primary” sources for anything further, it reserved the right to tap international public markets “when favorable [tailwinds] arise.”

The fiscal case for using that option has hardened in the past four months. The Kingdom ran a SAR 125.7 bn deficit in 1Q alone — more than double 1Q 2025 and most of the SAR 165.4 bn projected for the full year — and financed it all through debt markets. The most recent issuance also comes as the NDMC and Aramco are in separate negotiations for new loans from international banks.

REMEMBER- The Kingdom has remained one of the most active emerging-market borrowers this year. Aramco raised USD 4 bn in February and the PIF secured another USD 7 bn in May, marking the fund’s first hard-currency issuance since the US-Iran war began.